Q: My spouse and I purchased a house several years ago for my father to live in when he arrived in Canada. In fact, we did this as trustees because my father, as a new Canadian, did not qualify for financing but needed a place to live. Now my dad, who has been paying the carrying costs for the property since he arrived, qualifies for the mortgage and we want him to be put on title so he owns his own home. We have heard that he will have to pay land transfer taxes because there is an outstanding mortgage. Is this true?

A: In effect, you have been holding the property in trust for your dad since you purchased it and he was, in fact, the beneficial owner of the home. You can declare this trust relationship when your lawyer drafts the transfer documents and this can exempt you from paying land transfer tax because these transfer taxes were paid when the property was originally purchased.

There should have been some form of trust documentation executed when your dad arrived and took up residence in the property. You will also need to obtain the consent of the mortgage holder; thereby allowing your father to assume the mortgage and the financial responsibilities of the loan.

Good news for you and your father.

Jeffrey Cowan is a real estate lawyer and can be reached at jeff@cowanlaw.ca.